Health Insurers Have Their Way With Regulators

Four years ago, Medicare auditors came to an alarming conclusion: the federal government shouldn’t have paid a half-dozen insurance plans hundreds of millions of dollars to treat seniors in especially poor health.

The findings signaled that billing errors could be deeply rooted within private Medicare Advantage plans — which contract with the federal government to care for nearly 16 million elderly Americans — and that these abuses could be wasting taxpayer dollars at a ferocious clip.

Medicare expects to pay higher rates for legitimately sicker people who may require expensive care. But the auditors concluded that all six health plans they visited couldn’t justify the money they took in for 40 percent or more of their patients. That triggered whopping overpayments which auditors pegged at nearly $650 million for 2007 alone — just for those six plans.

One major Texas health plan was paid to care for a man it said had brain cancer. But his medical file showed he was treated for an enlarged prostate, a common ailment that didn’t merit any added payment, auditors wrote.